Years ago, I had a tiny little Chihuahua that was diagnosed with hydrocephalus. We were eventually fortunate enough to become involved in research with this baby and hydrocephauls....by using this approach, surgery for implantation of a shunt to drain the fluid from around the brain was done as a "clinical trial", and the costs were covered by the vet school. Rainey died when he was around 5-6 years old....he was on meds for seizures and we were continually having to have the shunt "unclogged"....just like in humans......
This was years ago, and I do not know if there has ever been any more research done for insertion of cerebral shunts in dogs or not.....this was so difficult on little Rainey....I am not sure I would ever do this again for a pup with hydrocephalus.....I am not sure what all we tried to do for this baby was actually in HIS best interest.....or mine, so reluctant to let him go peacefully. Thank God, I have never had this in any of my other pets, and never in my breeding program, so I have not had to revisit this dilemma. Praying for you, for guidance making the decisions you will soon be faced with, and support and strength, for the courage to do so.

Found this in a vet consult/journal article:
Temporary relief of the increased fluid pressure can be achieved with medication. Diuretics can be used to decrease fluid production in the brain but you have to be careful about causing the patient to become dehydrated. Electrolyte imbalances are also possible. Corticosteroids such as prednisone can relieve swelling in the brain and are also helpful. Oddly, the antacid omeprazole has been shown to decrease cerebrospinal fluid production by 26% though we do not know how this occurs.

For a more permanent resolution, a shunt must be surgically placed. A shunt is a small tube that is surgically implanted in one of the brain's ventricles. It siphons excess fluid away and drains it to another area of the body where it is harmless, such as the abdominal cavity. As the animal grows, shunt revisions are required to re-fit the shunt. If there is evidence of infection in the central nervous system, a shunt cannot be placed. This is because the placement of a foreign body (i.e., the shunt itself) will provide a shelter for the infection and the infection will never clear up. The infection must be resolved before the shunt is placed.
Complications of the shunt include: infection (4%-10% of all shunts placed in humans get infected), over-drainage, under-drainage, and obstructed tubing. The shunt can drain to either the abdominal cavity or the heart. Fewer complications, as well as easier placement, are associated with shunts that go to the abdomen. Overall, success rate for the ventriculoperitoneal shunt is felt to be approximately 80%.
Shunt placement is a procedure that not all veterinarians are comfortable performing. Discuss with your veterinarian whether referral to a specialist such as a surgeon or neurologist would be best for you and your pet."

Seems like it is a much more accessable procedure now! Not in research phase!